1st Quarter 2018 Large Cap Intrinsic Value Review

We hear arguments from bearish strategists that it is late in the US cycle, and they anticipate a recession in the foreseeable future. We do not think it is late cycle, and believe the US and worldwide economies should have visibility to grow over the next several years.

1st Quarter 2018 Intrinsic Value Opportunity Review

US stocks declined over 10% in a few days, while international indexes declined slightly more than 9% peak to trough. Markets recovered slightly through mid-March, when concerns about US tariffs led to a retest of the lows leaving most markets in the red for the quarter.

1st Quarter 2018 Global Intrinsic Value Equity Income Review

The best results for larger economies came from the US (up 7.5%) and Hong Kong (up 10.8%). January results were bolstered by Tax Reform in the US and an anticipated pickup in investment that should help the US and its trading partners.

4th Quarter 2017 Large Cap Intrinsic Value Review

"Animal spirits" are reawakening in the markets. The primary concerns voiced by skeptics are political in nature. Still, the market is not worrying about this as gridlock in DC is usually liked by markets. We expect 2018 to be a good year for markets, but are mindful that volatility will return at some point.

4th Quarter 2017 Global Intrinsic Value Equity Income Review

As we watch this unloved US market advance expand into a Global Bull Market, we realize this is what a secular bull market looks like. This secular (i.e. long term) bull market, which was confirmed in 2013 for the US by the new market highs, has been expanding globally more recently.

The Case for the S&P Doubling and a Global Bull Market

This secular bull market, which was confirmed in 2013 for the US by the new market highs, has been expanding globally more recently. With the economic excesses that triggered the great recession being largely addressed, we believe this global bull market has some time to run and should be supported by solid global economic growth.

3rd Quarter 2017 Large Cap Intrinsic Value Review

Market action this year is a little like watching poker. News outlets and many strategists have been concerned about any number of things, but the market has sized them up like a poker player and decided the probability of them occurring is low.

2nd Quarter 2017 Large Cap Intrinsic Value Review

Was the financial crisis of 2008 "The Great Recession" or the start of a long period that should be called "The Great Reset"? After the "Great Reset" things are getting normal again and we think that is good for the outlook.

2nd Quarter 2017 International Intrinsic Value Review

Emerging markets suffered deep recessions on the years long reset in commodity prices, slowing growth. Developed markets saw a reset in political tone as populism gained traction. All of these were headwinds to confidence and growth rates.

2nd Quarter 2017 Intrinsic Value Opportunity Review

2nd Quarter 2017 Global Intrinsic Value Equity Income Review

International economies seem to be in an early cycle recovery, implying good growth potential from here. These should contribute to synchronized global growth which would be a positive for stock performance in the second half.

1st Quarter 2017 Large Cap Intrinsic Value Review

The market feels like it needs a reality check, as overall market direction acts as though it believes in the synchronized growth story but internal measurements do not fully reinforce that belief. Let's do that check and see what we think reality will be later this year...

1st Quarter 2017 International Intrinsic Value Review

Most Global markets performed well during the first quarter as the concept of synchronized global economic growth gained some traction. US markets returned over 6%, while the ACWI ex-US returned 8%. Emerging markets outperformed developed markets, and international markets outperformed US markets.

1st Quarter 2017 Global Intrinsic Value Equity Income Review

Most Global markets performed well during the first quarter as the concept of synchronized global economic growth gained some traction. US markets returned over 6%, while the ACWI ex-US returned 8%. Emerging markets outperformed developed markets, and international markets outperformed US markets.

4th Quarter 2016 Large Cap Intrinsic Value Review

Markets are acting as though economic growth is more likely to be a tailwind than headwind. Fundamentally oriented strategies have performed better in the U.S. since midyear 2016 because of this confidence. As confidence grows overseas, we are starting to see our fundamentally oriented strategies regain traction there as well.

4th Quarter 2016 International Intrinsic Value Review

Investor confidence is increasing, which has led to fundamentals regaining some traction. Investor confidence was a casualty earlier this year while concerns regarding commodity weakness, speculation of China devaluing and whispers of weakness in some of the European Banks impacted sentiment until March.

4th Quarter 2016 Intrinsic Value Opportunity Review

A coordinated global economic expansion is probably beginning. While the US is in a later stage of expansion, our base case is that the economy can avoid a recession for 2017 and 2018 and may see a capital spending cycle unfold.

4th Quarter 2016 Global Intrinsic Value Equity Income Review

Recently, economic forecasts are rising as Chinese stimulus has prompted an economic recovery, and the beginnings of reflation. Chinese producer price inflation was significantly negative since 2012 while they began pursuing their economic shift to consumption. This inflation measure turned positive recently.

3rd Quarter 2016 Large Cap Intrinsic Value Review

The catastrophic nature of the last recession has put the fear of another 2008 episode in investor's mindset, since that is the most recent reference point. We would pose another possibility to consider. What if slower growth is the path to sustainable growth?

3rd Quarter 2016 Intrinsic Value Opportunity Review

Safety and dividend yield were the only factors the market rewarded as investors went into a capital preservation mode anticipating another 2008. Since then, the economy has continued to create jobs and produce more consumer income. The earnings recession from last year has begun to abate and investors are rewarding more fundamental factors in the third quarter.

3rd Quarter 2016 Global Intrinsic Value Equity Income Review

European bank solvency concerns have risen lately as investors fret over the capital cushion many of the major EU banks have to deal with bad loans. The companies say all is well, but the credit default swaps for Deutsche Bank are near the post crisis highs. Risks are elevated as a result of negative interest rates and low returns on their base business. This is a situation we are watching closely.

2nd Quarter 2016 Large Cap Intrinsic Value Review

Brexit... A turning point? Without a doubt, one of the largest geopolitical surprises of the past decade was the British vote to exit the EU. While the Brexit vote will be what most investors remember about this quarter, we think in time
it will be seen as a turning point for the EU.

2nd Quarter 2016 Intrinsic Value Opportunity Review

Currencies generally behaved themselves during the quarter. Though many analysts are wondering why the Dollar has not strengthened more given the turmoil in Europe. The dollar and Euro remain in a trading range compared to each other.

2nd Quarter 2016 Global Intrinsic Value Equity Income Review

While the Brexit vote will be what most investors remember about this quarter, we think in time it will be seen as a turning point for the EU. Since the financial crisis, European institutions have tended to take half measures when trying to improve economic activity.

1st Quarter 2016 Large Cap Intrinsic Value Review

"Disconnected" seems to be the best word to describe market performance for the quarter. After a narrowly led market dominated the scenes in the US last year (June-December), and most international markets were already well off their highs, worldwide markets went into a tailspin in January on recession fears.

1st Quarter 2016 International Intrinsic Value Review

1st Quarter 2016 Intrinsic Value Opportunity Review

After a narrowly led market dominated the scenes in the US last year (June-December), and most international markets were already well off their highs, worldwide markets went into a tailspin in January on recession fears.

4th Quarter 2015 Large Cap Intrinsic Value Review

Investors and central banks hit the "Reset" button in 2015. By that, we mean their assumptions for corporate earnings, asset returns, exchange rates, commodity prices and Central Bank easing were reset for many different markets as the year unfolded.

4th Quarter 2015 Global Intrinsic Value Equity Income Review

Consumer demand is better in China and Europe, though general industrial demand is weak as trade flows worldwide have been curtailed. Low rates and stimulative actions by Europe, China, and Japan should lead to a firmer growth estimates at some point later this year.

3rd Quarter 2015 Large Cap Intrinsic Value Review

We probably should not be surprised the S&P experienced a correction in the quarter. Currency appreciation, decreasing oil related capex, constrained consumer finances and limited government spending have crimped earnings expectations.

3rd Quarter 2015 International Intrinsic Value Review

After the Chinese devaluation in August, International markets broke down to the worst levels seen in eighteen months. Many factors have been weighing on investors' minds, but the largest has been the persistent lowering of growth expectations.

3rd Quarter 2015 Intrinsic Value Opportunity Review

US GDP growth should continue as recessions usually only result from the Fed raising rates to restrictive levels to fight inflation. Other parts of the globe are weaker than expected. Global growth forecasts should improve towards year end as developed and emerging economies take stimulative actions.

3rd Quarter 2015 Global Intrinsic Value Equity Income Review

European growth has improved after their balance sheet repair and work rule reform. Japan's outlook should improve under similar reforms from Abenomics. The overarching backdrop driving equities will remain very easy monetary policies that force investors to favor growth investments (stocks, real businesses) over holding debt.

2nd Quarter 2015 Large Cap Intrinsic Value Review

Bonds and Small Cap indexes posted losses during the quarter. Thus far into 2015, US stock returns have been lackluster, to say the least. We continue to believe the S&P 500 and other US indexes are in a secular bull market.

2nd Quarter 2015 International Intrinsic Value Review

International stocks performed better than their US counterparts during the quarter and year to date period, a trend we think will persist. We believe a "Quiet Revolution" has been occurring in Europe where the former problem economies that actually followed the International Monetary Fund's bailout advice have become growth leaders of the continent.

2nd Quarter 2015 Intrinsic Value Opportunity Review

Low bond rates and low inflation rates are combining to create an atmosphere where Pension Funds and long term investors have few alternatives to make reasonable returns on their income generating investments. This leaves few options besides stocks. When you consider the US is becoming energy independent, and new technology is evolving to create more efficient manufacturing processes, there are secular reasons why the US may stay as one of the better performing economies worldwide.

2nd Quarter 2015 Global Intrinsic Value Equity Income Review

We continue to believe the Global indexes are in a secular bull market. In Euro terms, some local European markets are at new highs and others are flirting with them. Given reform efforts underway, we think the Global economic recovery is probably real.

1st Quarter 2015 Large Cap Intrinsic Value Review

Bonds and Small Cap indexes did better than Large Cap US indexes. International stocks performed better than their US counterparts as well. US stocks have been the global leadership since we initiated Quantitative Easing after the financial crisis.

1st Quarter 2015 International Intrinsic Value Review

We believe as long as QE programs remain in place driving rates lower in developed markets, investors will be pressured into buying other asset classes, like stocks. Many markets are at new or multi-year highs for this and other reasons. We believe European, Chinese and Japanese growth should be firmer, while some commodity producing economies will probably see weaker growth.

1st Quarter 2015 Intrinsic Value Opportunity Review

While US stocks should continue to do well as the economic expansion continues, this changing of the guard regarding who is performing quantitative easing, could lead international markets to outperform domestic markets for the next year or more.

1st Quarter 2015 Global Intrinsic Value Equity Income Review

Over the trailing quarter and year, the market has preferred visibility over valuation. Specifically dividend yield was at the very bottom of factors that worked, significantly underperforming the ACWI index in both time periods.

Why Europe... Why Now?

We think it's time... time to be more constructive on Europe. When most people think of the continent, it is usually with the thought of the many headwinds facing them... which are all significant problems and most importantly, they are recognized and being dealt with.

4th Quarter 2014 Large Cap Intrinsic Value Review

Volatility spiked several times during the year primarily because the Fed stopped purchasing bonds, which investors perceived as a backstop for the market. We see encouraging signs on US growth and believe lower oil prices probably bolster the economies of oil consumers worldwide. Fundamentals matter more now than they did while the US QE program was in place, a fact that we think plays to our strengths.

4th Quarter 2014 International Intrinsic Value Review

International markets significantly trailed the US market, especially when measured in dollars. Volatility spiked several times during the year especially when growth scares became apparent in Europe and Japan. Geopolitical tensions also increased volatility. Growth in US demand should help some exporters over the next year. Quantitative Easing should have a positive impact on International Markets in the coming year.

4th Quarter 2014 Intrinsic Value Opportunity Review

The Intrinsic Value Opportunity posted a gain of 10.1% (gross of fees) in the quarter, exceeding the S&P 500 and the Russell 1000 Value returns of 4.9% and 5.0% respectively for the quarter. Year to date the IVO returned 18.5% compared to the S&P 500 and Russell 1000 Value returns of 13.7% abd 13.5% respectively.

4th Quarter 2014 Global Intrinsic Value Equity Income Review

Global markets posted a slight gain in the fourth quarter, with the ACWI index increasing .5% while gaining 4.7% for the year. The Global Intrinsic Value Equity Income Strategy underperformed the index during the quarter falling .9% (gross of fees) but slightly outperformed the index on a year to date basis.

3rd Quarter 2014 Large Cap Intrinsic Value Review

Our disciplines continue to add value compared to the benchmarks thus far this year. We've seen a change in the markets this year, as investors have returned to investing on fundamentals. Our sense is that this change back to fundamentals is likely to be durable, as the Fed is exiting their asset purchasing mode, worldwide growth is a little slower and rates remain low.

3rd Quarter 2014 International Intrinsic Value Review

International markets posted poor returned in the third quarter, with the ACWI ex-US index declining 5.19% and only gaining 0.39% YTD. Developed markets declined more than Emerging Markets. The International Intrinsic Value Strategy (gross of fees) outperformed the index during the quarter and year to date with a decline of -2.92% in teh quarter and a gain of 0.98%.

3rd Quarter 2014 Intrinsic Value Opportunity Review

The Intrinsic Value Opportunity posted a gain of 2.3% (gross of fees) in the quarter, exceeding the S&P 500 and the Russell 1000 Value returns of 1.1% and -0.2% respectively for the quarter. Year to date the IVO is fractionally behind both indexes. For the trailing twelve months the strategy is between the S&P 500 and Russell 1000 Value returns.

3rd Quarter 2014 Global Intrinsic Value Equity Income Review

Global markets posted poor returns in the thrid quarter, with the ACWI index declining -2.2% while gaining 4.2% for the year. The Global Intrinsic Value Equity Income Strategy slightly underperformed the index during the quarter but outperformed the index on a yeart to date basis.

Show Me the Money!

Two years after the European Central Banks pledge to "do whatever it takes to preserve the Euro", most investors are skeptically watching to see if they back that promise up with actions. Like we heard in the movie Jerry Maguire, investors are saying; "Show Me the Money!" And they seem to be following up with "And it better be enough."

2nd Quarter 2014 Large Cap Intrinsic Value Review

We are pleased with the performance of the strategy because even being underweighted in the sectors that have performed best, we are still performing well. While the Fed has been tapering their bond purchases, the market has been rewarding the traditional investment disciplines based on valuations, fundamental and technical disciplines and not simply bidding up high beta stocks.

2nd Quarter 2014 International Intrinsic Value Review

The International Intrinsic Value Strategy outperformed the index during the quarter and is recovering from the underperformance we experienced in the first quarter. Our performance over all other time frames is ahead of the index. Many of the leaders during the second quarter were markets that came under pressure last year. None of the leaders were among the largest markets, and each had specific reasons why investors would have looked to them for recovery from poor performance last year.

2nd Quarter 2014 Intrinsic Value Opportunity Review

For the Year to Date period, the strategy is lagging as well, but the longer term comparisons are much better.These results rank very well against most managers in our eVestment peer groups for all periods over 1 year. With the S&P gaining a little more than 7% year to date, we see a number of points investors should be aware of.

2nd Quarter 2014 Global Intrinsic Value Equity Income Review

Global markets posted good returns in the second quarter, with the ACWI index rising 5.23% led by the Emerging Markets. The Global Intrinsic Value Equity Income Strategy outperformed the index during the quarter.

1st Quarter 2014 Commentary | Cold Weather and a Cold War!

Following some pretty dramatic gains in 2013, the first quarter of 2014 generally saw lackluster returns in most global markets as cold weather and a cold war like move stifled market expectations. US stocks gained slightly less than 2%, while developed international markets rose slightly less than 1% and emerging markets declined.

1st Quarter 2014 Large Cap Intrinsic Value Review

In general, after a huge run from the government shutdown induced bottom during the fourth quarter, the S&P entered the 2014 at a new high. Most developed markets had done well in that time frame though the emerging markets were mostly mired in trading ranges and well below their 2011 highs.

1st Quarter 2014 International Intrinsic Value Review

Many of the leaders during the quarter were generally the smaller players in developed markets. Germany, the UK and Japan were laggards. Chinese weakness led to lackluster returns for emerging markets.

1st Quarter 2014 Intrinsic Value Opportunity Review

The Intrinsic Value Opportunity Strategy performed well during the quarter. Longer term results have been excellent as well, and weare pleased to report the product is in the top decile of value managers according to eVestment, over all time frames mentioned above since inception of the product.

1st Quarter 2014 Global Intrinsic Value Equity Income Review

Most global markets marked time during the first quarter, with the ACWI rising 1.2% and emerging markets actually declining. Against this, the GIVEI strategy returned 1.1% (gross of fees) during the quarter, about in line with the market. Concerns about US and Emerging Markets economies weakening dominated the quarter. Most developed markets ended the quarter better though as investors got over their mid-quarter jitters.

4th Quarter 2013 Commentary | The Year They Got It Right

Last year will probably be remembered as "The Year They Got It Right". Now for the natural question, who are "They" and what is "It". "They" are the collection of groups that participate in our global economy; governments, private sector and consumers. "It" refers to the markets and the economies of the world.

4th Quarter 2013 Large Cap Intrinsic Value Review

The fourth quarter will likely be remembered as "that time they shut the government and nobody cared." It may feel like ancient history, but early October was when the shutdown debate was raging. As the quarter wore on, we found that politicians can compromise, and worries about debt defaults were misguided.

4th Quarter 2013 International Intrinsic Value Review

The International Intrinsic Value product was well ahead of the ACWI ex-US for the quarter and year to date period. We expect that both the Emerging and Developed markets offer good opportunities over the coming year.

4th Quarter 2013 Intrinsic Value Opportunity Review

The Intrinsic Value Opportunity Strategy had a banner year, beating the benchmark during the quarter and year by dramatic margins. Longer term results have been excellent as well, and we are pleased to report the product is in the top decile of value managers according to eVestment, over all time frames since inception.

4th Quarter 2013 Global Intrinsic Value Equity Income Review

The ACWI index had a very nice quarter up 7.42%, specifically led by the developed markets in the US and Europe. For the year, a strong double digit return for the ACWI index is also being led by the developed markets, again primarily by the US market. Emerging markets have lagged significantly for the year given concerns specifically related to a slowing China growth story. We expect that both the Emerging and Developed markets offer good opportunities over the coming year.

The Case for S&P 2500

Something extraordinary just happened, and most market participants have missed it. It’s never happened in my investing career and has only happened once in the past 50 years. It has nothing to do with the government shutdown, wrangling in Washington or the gloomy predictions you hear from the TV pundits. The market decisively broke out of a 14 year trading range!

3rd Quarter 2013 Commentary | Keep your eye on the ball...

At this writing, the politicians are arguing, the discretionary portion of the government is shut down, and most observers are yawning. Investors really don't seem to mind that there is a government shutdown. Many analysts and news anchors expected it to last until the debt ceiling discussions are concluded. This deadline is October 17 on paper, but anything can happen. This entire episode feels more like a frustrating posturing exercise by both sides, but there may be a silver lining to it. At some point, it will be over and the markets will get a relief rally.

3rd Quarter 2013 Large Cap Intrinsic Value Review

Investors are likely to remember this quarter as the one where the Fed surprised everyone and did not taper the quantitative easing program. Maybe we are old fashioned, but the really big surprises used to be when investors were not expecting action and the Fed surprised with a rate cut or increase. This is just more evidence of the new world we are in.

3rd Quarter 2013 International Intrinsic Value Review

Reviewing the events of this quarter, we found that the economic news was encouraging on many fronts. Europe showed positive growth in the quarter, a dramatic change from the past couple of years. The German elections are completed, which allow their government to now start addressing growth. We believe that more growth oriented policies are likely from Germany and other European governments.

3rd Quarter 2013 Intrinsic Value Opportunity Review

The Intrinsic Value Opportunity fund performed well during the quarter. Longer term numbers are excellent as well, and we are pleased to report the product is in the top decile of value managers according to eVestment, over all time frames since inception.

3rd Quarter 2013 Global Intrinsic Value Equity Income Review

The ACWI index had a very nice quarter up 8.0%, specifically led by the developed markets in Europe and the United Kingdom. For the year, a strong double digit return for the ACWI index is also being led by the developed markets, both the US as well as internationally. Emerging markets have lagged significantly for the year given concerns specifically related to a slowing China growth story. We expect that both the Emerging and Developed markets offer good opportunities over the coming year.

Economic Forecast 2013 | Dancing on the Edge of the Cliff

We still face signigicant fiscal drag in 2013, as most Americans will receive a tax increase. For example, the estate tax, currently 35% with a $5 million exemption was scheduled to go to a 55% rate with only a $1 million exemption. I am relieved it will be a 40% rate with a $5 million exemption and is indexed for inflation.

The Case For ADR's | Debunking Some Myths

One common misperception we have encountered is that investors using only American Depository Receipts (ADRs) are not as sophisticated as those that use only Ordinaries. As a manager using only ADRs we find that myth a little perplexing. After all, ADRs are exchange traded financial instruments, issued by banks to represent a foreign company's publicly traded stock and they trade just like US stocks. In other words, they simplify investing in international markets, but there's nothing unsophisticated about them. This whitepaper discusses some of the myths associated with ADR's and presents the benefits we see to investing using ADR's.

International Intrinsic Value Ranked Among Lipper's Best 4Q11

We are pleased to announce that Lipper Marketplace, a nationally recognized fund analysis firm, has listed the Todd-Veredus International Intrinsic Value Strategy as a top performer (see the attached "Lipper's Best Managers" list) for the fourth quarter of 2011. Our portfolio placed 20th out of 466 international strategies they measured in the quarter.